Close Brothers Group plc · LSE:CBG
Close Brothers — Investor Day (December 2018)
33 slides from Close Brothers's investor day presentation, Dec 4, 2018
Slide 1: Close Brothers Asset Management Investor seminar
Close Brothers Asset Management Investor seminar 4 December 2018
Slide 2: Disclaimer
Disclaimer Certain statements included or incorporated by reference within this presentation may constitute “forward-looking statements” in respect of the group’s operations, performance, prospects and/or financial condition. By their nature, forward-looking statements involve a number of risks, unc
Slide 3: Agenda
Agenda 1. Introduction Preben Prebensen, Group Chief Executive 2. Business model and strategy Martin Andrew, Chief Executive Officer Asset Management 3. Advice and financial planning Andy Cumming, Head of Advice 4. Investment proposition Nancy Curtin, Chief Investment Officer and Head of Investments
Slide 4: Introduction
Introduction Preben Prebensen Group Chief Executive
Slide 5: Introduction: Asset Management within the Close Brothers group
Introduction Asset Management within the Close Brothers group Characteristics of the Close Brothers model Relationships Expertise Service Discipline Asset Management Banking Winterflood FY18 performance: • Excellent strategic fit with Close Brothers • 33% AOP growth brand and culture • 14% of group
Slide 6: Business overview and strategy
Business overview and strategy Martin Andrew Asset Management Chief Executive Officer
Slide 7: Realising our vision for Asset Management
Realising our vision for Asset Management Building a new model UK wealth management business 2011 premises 2011 vision Long-term growth opportunity Investment Evolving marketplace Advice management Appetite for advice New model Private Client Differentiated and client centric business Fee compressio
Slide 8: Close Brothers Asset Management today
Close Brothers Asset Management today Top 20 UK wealth manager Target Affluent clients HNW clients market Investable £200k - £1m £1m - £20m+ £12bn* assets client assets 15,000+ families 2,500+ families Clients Professionals, business owners, retirees, trustees… 100+ 9 offices advisers Financial Inve
Slide 9: Where Close Brothers fits in the market place
Where Close Brothers fits in the market place UK wealth management Financial Vertically Wealth advisers and Private banks Self directed integrated firms managers networks Modern Merchant Banking 9
Slide 10: Close Brothers' distinctive business model
Close Brothers’ distinctive business model Vertically integrated and multi-channel Multi-channel distribution model Dual channel • Maximises growth Client potential Direct clients Intermediated clients • Diversification channel • Third party endorsement of investment Relationship Close Brothers advi
Slide 11: Business model: client benefits and distribution of revenue
Business model Client benefits and distribution of revenue and TCA Benefits to clients Benefits to Close Brothers Intermediated Direct clients (IFA) clients One stop shop Total client assets £9bn £3bn Choice and flexibility Net inflows** 67% 33% Adaptable to client needs Client asset mix Advised IM
Slide 12: Financial performance: growth in managed assets
Financial performance Growth in managed assets Growth in managed assets (FY14 to FY18) 14 Growth in managed assets … + Advised only assets = TCA 12 (1.1) 1.8 1.7 10 £ billions 8 3.6 6 10.4 12.2 4 6.2 2 0 31 July Net Inflows Markets Disposals 31 July Advised 31 July 2013 AuM 2018 AuM Only 2018 TCA Mo
Slide 13: Key performance indicators
Key performance indicators Strong net inflows and steady increase in operating margin Net Inflow % of opening Operating Margin** managed assets 15% 25% 12% 20% 12% 20% 19%* 10% 17% 10% 16% 9% 9% 9% 15% 12% 6% 6% 6% 10% 3% 5% 0% 0% FY14 FY15 FY16 FY17 FY18 FY14 FY15 FY16 FY17 FY18 *Includes a 4% non-
Slide 14: Profit drivers: top line revenue growth
Profit drivers Top line revenue growth 97% overall service Retention satisfaction from HNW clients Existing clients Share of wallet 94% overall client service satisfaction in advice Referrals NPS of +61 for our HNW Bespoke business Over 500 financial Organic Multi-channel education seminars per annu
Slide 15: Profit drivers: operating leverage and efficiency
Profit drivers Improving operating leverage and efficiency Client segmentation Front office Adviser and PM productivity Significant cost reduction for the business Digital portal, Client Technology relationship Significantly enhanced client custody and IM management experience Completed End 2019 Imp
Slide 16: Advice and financial planning
Advice and financial planning Andy Cumming Head of Advice
Slide 17: Integrated proposition meeting clients' needs
Integrated proposition meeting clients’ needs Benefits of our model People need, and are willing to pay for, good financial advice Clients need a wealthClient management plan wealth management plan Value in what we do recognised Fund required income in retirement by clients and advisers Invest to ac
Slide 18: Breadth of advice proposition
Breadth of advice proposition Distinctive service Financial planning Investment planning Broad range of Pension planning advice offering includes… Estate and tax planning Protection Mortgage advice Breadth and quality Personal client Distinctive Close Brothers service… of capabilities service Modern
Slide 19: Breadth of service proposition
Breadth of service proposition Client centric proposition designed to maximise growth Integrated propositions Delivery method Face to face Telephone Online Client Full service Full service choice in Type N/A advice Ad hoc Ad hoc - CBAM - CBAM - CBAM Investment approach - 3rd party - 3rd party - 3rd
Slide 20: Priorities: strategy for financial advice
Priorities Strategy for financial advice Providing personal service and long term client relationships - Client segmentation 1 - Adviser segmentation - Adviser retention and client insight Growing adviser numbers - Hiring 2 - Academy - Small acquisitions Increasing adviser productivity - Segmentatio
Slide 21: Investment management
Investment management Nancy Curtin Chief Investment Officer and Head of Investments
Slide 22: Diversified investment management proposition
Diversified investment management proposition Multi asset class investment approach leads to real returns Benefits to client Benefits to Close Brothers Total investment Less volatility in flows solution Multi Global asset Reduces exposure to Optimised risk adjusted single asset class and returns sec
Slide 23: Diversified investment management proposition
Diversified investment management proposition Institutional discipline & simplicity here . . . allows for . . . Flexibility & choice here Investment engine Client choice Strategic asset allocation Vehicle Equities Alternatives ETFs Style Fixed Funds income Risk level Research Modern Merchant Banking
Slide 24: Investment Management range and capabilities
Investment Management range and capabilities 65 investment professionals Risk graded portfolios Vehicle Funds Bespoke 31 Style Direct Managed Passive Investment Managers Managed Assets* £4.1bn £4.0bn Supported by Research team Risk and performance team *The £10.4bn managed assets at 31 July 2018 als
Slide 25: Investment performance – absolute
Investment performance – absolute Strong long-term performance for clients Close Brothers absolute investment performance – annualised returns (%) 1 year 3 years 5 years 15 15 15 Conservative 10 10 10 5 5 5 0 0 0 Direct Managed Passive Bespoke Direct Managed Passive Bespoke Direct Managed Passive Be
Slide 26: Investment performance – relative
Investment performance – relative Strong performance record vs competition Close Brothers annualised investment performance relative to peer group (%) 1 year 3 years 5 years 5 5 5 Conservative 4 4 4 3 3 3 2 2 2 1 1 1 0 0 0 Direct Managed Passive Bespoke -1 Direct Managed Passive Bespoke Direct Manag
Slide 27: Summary: differentiated investment management proposition
Summary Differentiated investment management proposition Choice via a range of propositions - Range of propositions across risk level, style and vehicle 1 - Optimised strategic asset allocation framework - Appeals to widest possible arena of clients and advisers Institutional quality and discipline
Slide 28: Key takeaways and future outlook
Key takeaways and future outlook Martin Andrew Asset Management Chief Executive Officer
Slide 29: Outlook for Close Brothers Asset Management
Outlook for Close Brothers Asset Management A well positioned business with significant long-term opportunity Long-term growth opportunity • Integrated model presents economic advantages and strategic flexibility Evolving marketplace • Client centric proposition offers flexibility and choice Appetit
Slide 30: Q&A
Q&A Aa Close Brothers Modern Merchant Banking
Slide 31: Appendices
Appendices Aa Close Brothers Modern Merchant Banking
Slide 32: Biographies
Biographies Nancy Curtin Martin Andrew Andy Cumming Chief Investment Officer and Chief Executive Officer Head of Advice Head of Investments Martin joined Close Brothers in 2005 Andy has held the position of Head of Appointed in 2010, Nancy oversees a and has been CEO of the Asset Advice since July 2
Slide 33: Close Brothers Group plc contact details
Close Brothers Group plc 10 Crown Place London EC2A 4FT LENDING │ DEPOSITS │ WEALTH MANAGEMENT │ SECURITIES www.closebrothers.com